Correlation Between Origin Agritech and Bunzl Plc
Can any of the company-specific risk be diversified away by investing in both Origin Agritech and Bunzl Plc at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Origin Agritech and Bunzl Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Agritech and Bunzl plc, you can compare the effects of market volatilities on Origin Agritech and Bunzl Plc and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Origin Agritech with a short position of Bunzl Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Agritech and Bunzl Plc.
Diversification Opportunities for Origin Agritech and Bunzl Plc
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and Bunzl is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Origin Agritech and Bunzl plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl plc and Origin Agritech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Origin Agritech are associated (or correlated) with Bunzl Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl plc has no effect on the direction of Origin Agritech i.e., Origin Agritech and Bunzl Plc go up and down completely randomly.
Pair Corralation between Origin Agritech and Bunzl Plc
Assuming the 90 days trading horizon Origin Agritech is expected to under-perform the Bunzl Plc. In addition to that, Origin Agritech is 4.68 times more volatile than Bunzl plc. It trades about 0.0 of its total potential returns per unit of risk. Bunzl plc is currently generating about 0.06 per unit of volatility. If you would invest 3,047 in Bunzl plc on September 12, 2024 and sell it today you would earn a total of 1,291 from holding Bunzl plc or generate 42.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Agritech vs. Bunzl plc
Performance |
| Timeline |
| Origin Agritech |
| Bunzl plc |
Origin Agritech and Bunzl Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Agritech and Bunzl Plc
The main advantage of trading using opposite Origin Agritech and Bunzl Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Agritech position performs unexpectedly, Bunzl Plc can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bunzl Plc will offset losses from the drop in Bunzl Plc's long position.| Origin Agritech vs. REINET INVESTMENTS SCA | Origin Agritech vs. AOYAMA TRADING | Origin Agritech vs. Japan Asia Investment | Origin Agritech vs. MAROC TELECOM |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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